Sanctions off, Agrani Satellite begins countdown

With lifting of sanction by US on India the uncertainty over the Subhash Chandra-promoted Agrani Satellite Services Ltd (ASSL) project seems to be over. The firm was in the process of seeking a project-specific waiver of the US sanctions for its Rs 1,150-crore satellite project.

The company expects to achieve financial closure and sign the contract with Alcatel for the ‘in-orbit’ delivery of the satellite before the end of the calendar year,” ASC Enterprises Ltd group president and chief executive officer Jai P Singh said. ASSL is currently a wholly-owned subsidiary of ASC Enterprises.

The Agrani satellite project aims to establish ‘C’ and ‘Ku’ band satellite capacities for leasing out to TV broadcasters, telecom and Internet companies.

The funding plan involves an equity infusion of Rs 460 crores, while the debt component is estimated at about Rs 690 crores, which will be mobilised from the domestic market. The Industrial Development Bank of India (IDBI) is the lead arranger for the debt and has already sanctioned Rs 300 crores for the project. The Life Insurance Corporation has also sanctioned Rs 75 crores.

On the equity front, ASSL has got approval from the FIPB to offer up to 74 per cent equity to overseas partners involving a foreign direct investment of about Rs 350 crores. Alcatel Space Industries, Arainespace and Agrani Satcom Mauritius, a special purpose investment vehicle of Subhash Chandra and Associates, are among the companies slated to pick up stake in ASSL.

The satellite will be delivered 19 months after financial closure. The company expect to begin operations by mid-2003.

The satellite, with a life-span of 14 years, has 24 ‘C’ band and 14 ‘ku’ band transponders. The promoters expect the project to be cash positive at the start of the second year of operations.